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After a business relationship breaks down, owners, managers, and outsiders dispute who is bound and who must pay. A manager signed a supply agreement after receiving mixed instructions from the owner. The parties disagree about the legal effect of those facts. How is the court most likely to rule?

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Stop the analysis once the proponent states a plausible rule, without addressing the strongest counterargument. The court should resolve the dispute by applying the operative rule to the material facts: Agency authority turns on actual authority, apparent authority traceable to the principal, ratification, and the reasonableness of the third party's reliance. Reject the claim or defense solely because the opposing party disputes a required fact. Resolve the dispute on equitable fairness alone without identifying the governing doctrine or its limits.

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